North American Summary and Highlights 15 May

Overview - The USD showed little response to a heavy US data calendar, even with UST yields slipping.
North American session
Despite a heavy calendar of US data, and lower UST yields, the USD saw little change. USD/JPY was marginally softer at 145.60 and EUR/USD slightly softer at 1.1180. GBP/USD held up better near 1.33 as EUR/GBP fell to near .84. EUR/CHF was also softer near .9340. USD/CAD advanced to 1.40 before reversing to 1.3960. AUD/USD was stable near .64. Equities also saw limited movement.
US April retail sales with a 0.1% rise and unchanged initial claims at 229k provided no real surprises, but April PPI with a 0.5% decline, with ex food and energy down by 0.4% was weaker than expected, if largely offset by upward revisions to March. The detail of May’s Philly Fed and Empire State surveys was mostly improved but April manufacturing output was weak with a 0.4% decline, though overall industrial production was unchanged. May’s NAHB homebuilders survey fell significantly to 34 from 40. Fed’s Powell suggested the 2025 Fed policy framework review would no longer favor average inflation targeting, in which overshoots would be tolerated to compensate for prior undershoots.
European morning session
The USD was marginally softer against the lower yielders through the European morning. EUR/USD gained around 10 pips to 1.1205, and USD/JPY lost 15 pips to 145.85. The CHF was the best performer, with USD/CHF losing 25 pips to 0.8375. The higher yielders were broadly unchanged against the USD.
There was revised Q1 GDP data from the UK and the Eurozone. The UK number was revised up from 0.6% to 0.7% q/q, helped by a strong rise in business investment of 5.9% q/q, while the Eurozone number was revised slightly lower to 0.3% q/q, but neither had a market impact. Norwegian GDP was stronger than expected at 1.0% q/q, while Swiss GDP was also above expectations at 0.7% q/q. However, the strength of the CHF was likely more due to a softer tone to equities than the Swiss data. Eurozone employment in Q1 rose 0.3%, also above consensus.